Yell sales increase despite price cap

The owner of the Yellow Pages directories today said growth in UK revenues had quickened even though it was finding it harder to hold on to advertisers.

Yell Group, based in Queen's Walk, Central Reading, saw turnover in the UK rise by 4.3 per cent to £466.6 million in the nine months to December 31 - higher than the 3.3 per cent growth seen in the first half of its financial year.

The improvement was better than expected by

analysts and came despite the price cap imposed by

regulators, which cut prices at Yellow Pages by an average of 3.4 per cent.

Although the total number of advertisers at its Yellow Pages and Business Pages directories rose slightly to 354,000, Yell said it was not retaining as many clients as a year ago. The overall retention rate of advertisers fell to 75 per cent during the nine months, compared with 78 per cent in the same period a year earlier.

According to Yell, this reflected the "substantial growth" over the past four years as new customers were harder to retain than those advertisers with a track record of benefiting from

listings in its directories.

Group turnover rose 6.7 per cent to £897.9 million over the past nine months or 12.5 per cent after stripping out the impact of the weak US dollar in the period. Operating profits totalled £182 million in the period, against £79.5

million a year ago.

n Gas firm BG Group gave a new lease of life to its North Sea operation today after pledging to increase production and target growth opportunities.

The former British Gas group said its strategy would push back the expected point of production decline in the North Sea beyond 2007.

The plans emerged as BG, which generates around half its business from the North Sea, announced a 36 per cent improvement in underlying earnings for the final three months of 2004. Despite the impact of a weaker dollar, the figure of £249 million helped full-year earnings to rise by 23 per cent to £842 million.